[Federal Register: May 17, 2005 (Volume 70, Number 94)]
[Rules and Regulations]
[Page 28401-28407]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17my05-17]
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Part IV
Department of Labor
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Veterans' Employment and Training Service
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20 CFR Part 1001
Funding Formula for Grants to States; Final Rule
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DEPARTMENT OF LABOR
Veterans' Employment and Training Service
20 CFR Part 1001
RIN 1293-AA11
Funding Formula for Grants to States
AGENCY: Veterans' Employment and Training Service (VETS), Department of
Labor.
ACTION: Final rule.
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SUMMARY: The Department of Labor is issuing a final rule to implement
section 4(a)(1) of Public Law 107-288, the Jobs for Veterans Act (Act),
which amends 38 U.S.C. 4102A. This final rule establishes formula
criteria for making funds available for veterans' employment services
and the Transition Assistance Program (TAP). This rule replaces the
Interim Final Rule and covers the second phase-in year of fiscal year
2005 and the permanent program beginning in fiscal year 2006.
DATES: This final rule takes effect June 16, 2005.
FOR FURTHER INFORMATION CONTACT: Paul Robertson, Legislative Analysis
Division, VETS, U.S. Department of Labor, Room S-1325, 200 Constitution
Avenue NW., Washington, DC 20210, or by e-mail at
robertson.paul@dol.gov or call 202-693-4714.
SUPPLEMENTARY INFORMATION: The Preamble to this Final Rule is organized
as follows:
I. Background--provides a brief description of the development of
the Final Rule.
II. Authority--cites the statutory provisions for the Final Rule.
III. Section-by-Section Review of the Rule--summarizes pertinent
aspects of the regulatory text, describes its purposes and
application, and summarizes and responds to comments received on the
Notice of Proposed Rulemaking published July 6, 2004 (69 FR 40724).
IV. Administrative Information--sets forth the applicable
information as required by law.
This Final Rule is published following a 60-day comment period
during which comments were received from three individuals/
organizations. Those comments are addressed in the appropriate sections
of this Final Rule. We are grateful for the effort a concerned
individual took to submit comments through Regulations.gov. We
appreciate the commenter's interest in programs serving veterans.
However, because the comments do not specifically relate to the
provisions of this Rule, we will not address them in this Preamble.
I. Background
The President signed the Jobs for Veterans Act (Pub. L. 107-288)
into law on November 7, 2002. The Act amends title 38 of the United
States Code to revise and improve employment, training, and placement
services furnished to veterans. This rule implements the provisions of
38 U.S.C. 4102A(c) as amended by section 4 of the Act that establishes
a new funding formula for making funds available to each State, with an
approved State Plan, to support the Disabled Veterans Outreach Program
(DVOP) and the Local Veterans Employment Representative (LVER)
programs. Additionally, funding will be made available to support TAP
and respond to exigent circumstances.
Congress allowed for the phasing in of the new statutory funding
formula ``over the three fiscal-year period'' beginning in fiscal year
(FY) 2003, which started on October 1, 2002 (38 U.S.C.
4102A(c)(2)(B)(ii)). Because of the late enactment of the law, funding
for year one of the phase-in had already occurred by the date of
enactment. Congress intended that the formula be phased-in and fully
implemented by the beginning of fiscal year 2006, which is October 1,
2005. The phase-in provision was not intended to delay the anticipated
date of full implementation of the formula.
In order to adhere to the implementation expectations of Congress,
the phase-in process began in fiscal year 2004, through publication of
an Interim Final Rule amending 20 CFR part 1001 on June 30, 2003 (68 FR
39000). The Interim Final Rule set forth the funding criteria to be
used in fiscal year 2004. In order to ensure full public comment and
adequate public notice of the new funding criteria applicable after
fiscal year 2004, the Interim Final Rule was set to expire on September
30, 2004, and the Department committed to issuing a Notice of Proposed
Rulemaking to establish the funding formula to be used in fiscal year
2005 and the future.
Accordingly, on July 6, 2004, a Notice of Proposed Rulemaking with
a request for comments was published in the Federal Register, at 69 FR
40724. The Notice of Proposed Rulemaking used the same formula and data
sources as the Interim Final Rule for making allocations among States.
We thoroughly reviewed every comment on the proposed rule received
during the comment period. These comments are summarized and responded
to in section III of this Preamble.
This Final Rule applies the same funding criteria and data sources
as that established in the Notice of Proposed Rulemaking and the
Interim Final Rule. These criteria were used as the basis for
allocating Fiscal Year 2005 funds (initially made available under a
series of Continuing Resolutions) among the States. By so doing we were
able to continue funding these programs without harm to the States or
to veterans seeking services.
II. Authority
The statutory authority for this Final Rule is 38 U.S.C.
4102A(c)(2)(B), as amended by the Jobs for Veterans Act, enacted
November 7, 2002, as Public Law 107-288.
III. Section-by-Section Review of the Rule
A. Funding Formula--Basic Grant
The Act requires the Secretary to make funds available to each
State, upon approval of an ``application'' (i.e., a State Plan), to
support the DVOP and LVER programs designed to provide employment
services to veterans and transitioning servicemembers (38 U.S.C.
4102A(c)(2)(B)). The Act further allows the Secretary to use such
criteria as the Secretary may establish in regulation, including
civilian labor force and unemployment data in determining the funding
levels (38 U.S.C. 4102A(c)(B)(i), as amended by the Act). The statute
requires that the amount of funding available to each State reflect the
ratio of: (1) The total number of veterans residing in the State who
are seeking employment; to (2) the total number of veterans seeking
employment in all States (38 U.S.C. 4102A(c)(B)(i)(I) and (II)).
Additionally, the Act permits the Secretary to establish minimum
funding levels and hold-harmless criteria, in order to mitigate the
impact upon States whose funding levels may be significantly affected
by the implementation of the new formula (38 U.S.C. 4102A(c)(B)(iii)).
The Act states that the use of this formula will be phased-in over
the three fiscal-year period beginning October 1, 2002. Since the
statute was not enacted until November 7, 2002, after the beginning of
fiscal year 2003, we interpret this to mean that the first phase-in
year for the funding formula was fiscal year 2004, which began on
October 1, 2003. This will only allow a two-year phase-in period,
fiscal years 2004 and 2005, instead of the three years as contemplated
by the statute. To give the States the maximum phase-in period
possible, an Interim Final Rule was published on June 30, 2003, which
expired September 30, 2004. This Final Rule replaces the Interim Final
Rule and
[[Page 28403]]
covers the second phase-in year of fiscal year 2005 and the permanent
program beginning in fiscal year 2006. It applies the same funding
criteria and data sources as that established in the Notice of Proposed
Rulemaking and the Interim Final Rule. These criteria were used as the
basis for allocating Fiscal Year 2005 funds (initially made available
under a series of Continuing Resolutions) among the States.
1. Basic Grant Funding Formula and Data and Methodology
We are using the same data sources as those used in the FY 2004
formula established by the Interim Final Rule. The ratio of the number
of veterans seeking employment in each State to the number of veterans
seeking employment in all States is best determined using data
collected through the Current Population Survey (CPS) and the Local
Area Unemployment Statistics (LAUS), both of which are administered by
the Bureau of Labor Statistics (BLS). We are using LAUS data to
determine the number of unemployed persons in the civilian labor force
because LAUS data are considered to be the most reliable data on the
levels of general unemployment at the State level; and the Office of
Management and Budget (OMB) requires Agencies allocating Federal funds,
that include unemployment as a factor, to use LAUS as the indicator of
unemployment unless the authorizing statute specifies otherwise (OMB
Statistical Policy Directive 11). We are using the CPS data to
determine the number of veterans in the civilian labor force because
the CPS is considered to be the most reliable source of data on the
levels of veteran participation in the civilian labor force at the
State level. A subset of the CPS data on veterans in the civilian labor
force does provide State level estimates of the number of unemployed
veterans. However, because the sample size of the unemployed veteran
subgroup at the State level is so small, these estimates are subject to
large sampling errors. Therefore, the funding levels would be subject
to undue variability/volatility if that subset of the CPS data were
used alone to determine the number of unemployed veterans at the State
level.
Because LAUS data are based on the total unemployment level for a
State, we concluded that LAUS data are the best available measure of
persons who are seeking work. Accordingly, we concluded the number of
veterans seeking employment in each State can be best determined by
using a ratio of the general unemployment level in each State compared
to the general unemployment level in all States (LAUS for the
individual States/LAUS for all States), in combination with the number
of veterans in the civilian labor force in each State compared to the
number of veterans in the civilian labor force in all States (CPS for
the individual States/CPS for all States). The result of these two
ratios is averaged and converted to a single ratio of the number of
veterans seeking employment in each State compared to the number of
veterans seeking employment in all States. Three-year averages of the
CPS and LAUS data are used in calculating the funding formula to
stabilize the effect of annual fluctuations in the data in order to
avoid undue fluctuations in the annual amounts allocated to States.
We received one comment on the use of these data sources in
response to the issuance of the Notice of Proposed Rulemaking. The
commenter expressed the concern that the ``number of unemployed
persons'' is different than that required by the Act. They offer
``[t]he term `veterans seeking employment' could refer to veterans who
are seeking employment because (1) they are unemployed and receiving
Unemployment Insurance (UI) benefits; (2) they are out of work, but
don't qualify for UI benefits; (3) they are looking for a better job
than their current job; or (4) they are preparing for separation from
the service.''
Response: All individuals, including veterans, who are classified
in LAUS as unemployed are considered to be seeking employment, both
those who receive UI benefits and those who do not qualify for UI
benefits (items 1 and 2, as specified in the comment). Thus, these two
groups also are considered in the formula through the use of LAUS data.
Currently, there is no valid data source that collects and measures
those individuals who are looking for a better job than their current
one (item 3, as specified in the comment). However, since these
individuals are employed, they are considered a part of the civilian
labor force and thus are included in the formula. Individuals who are
preparing for separation from military service are not part of the
civilian labor force nor are they veterans (item 4, as specified in the
comment). Therefore they are properly omitted from the formula. It is
noted that separating servicemembers may be served and are served
through the Transition Assistance Program (TAP) and funding for
services to those individuals is provided in this Final Rule through
amounts made available for TAP services based on a State's plan.
Therefore, no change is being made.
The same commenter suggested that rather than use ``LAUS data for
the total number of unemployed persons in each State, VETS should work
with the Employment and Training Administration to ensure that States
report data regarding their veterans more consistently in all DOL
administered programs.''
Response: OMB Statistical Policy Directive 11 requires any federal
agency allocating federal funds that include unemployment as a factor
to use LAUS as the indicator of unemployment, unless the authorizing
statute specifies otherwise. Additionally, it has been determined by
the BLS that LAUS data are the most reliable data for determining
unemployment at the State level. While we agree that the availability
of a more reliable source of information on unemployed veterans would
be desirable, we submit that in the absence of such a data source we
must use the most reliable data currently available. Accordingly, no
change is being made.
An additional comment by the same commenter expressed an opinion
that the use of a three-year average is contrary to the express intent
of the Act. They further stated, ``The change in the prior funding
formula was made in order to ensure that the nation's resources for
serving veterans are allocated in proportion to the nation's veterans
who are seeking employment. The Act authorizes only the use of a hold-
harmless criteria and minimum funding levels.''
Response: In our view, the Secretary is clearly authorized to
include the 3-year average criterion in the formula established under
38 U.S.C. 4102A(c)(2)(B). The Secretary is authorized to use ``such
criteria as the Secretary may establish'' within the parameters of that
section (i.e., the required data sources and ratio). The 3-year average
criterion is used for sound statistical reasons. The State level data
employed in the funding formula on the number of veterans in the
civilian labor force are based entirely on the CPS. The State level
data employed in the funding formula on the number of unemployed
individuals are based upon the LAUS data, which are based partially on
the CPS. All CPS data are derived from a survey that is conducted with
a statistical sample of households. Like all data derived from
statistical samples, the results of the CPS include sampling error.
Therefore, the CPS results for a given State can vary from one year to
the next simply due to the sampling error, without any change occurring
in the underlying labor force characteristic being measured.
When the funding formula methodology was under development, funding
allocations for basic grants were
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initially estimated based upon the CPS and LAUS data for the most
recent year, as suggested by the commenter. These initial estimates
clearly indicated that ``statistical noise'' due to sampling error
would have introduced a disruptive pattern of unnecessary annual
fluctuations in funding levels, in addition to the desirable shifts in
funding attributable to changes in the labor force characteristics
being measured. Further development suggested that the three-year
average provided the best available means of capturing the underlying
labor force trends, while suppressing the year-to-year statistical
variation. BLS staff members with specialized expertise related to the
CPS and LAUS data sources were consulted during the development of this
approach and concurred that the approach and its underlying rationale
are technically sound. Based upon this technical foundation, it was
concluded that this approach enables each State, and the workforce
development system as a whole, to respond to relevant labor force
changes in the most orderly manner. Therefore, the three year average
is retained in the Final Rule.
One commenter pointed out that State Plans are prepared in response
to estimated allocation amounts based upon a projection of the
appropriation for a given fiscal year. This commenter requested
clarification regarding the policies to be followed if: (a) The actual
appropriation was higher than the projection; and (b) The actual
appropriation was lower than the projection by a small amount.
Response: In response to these comments, we have revised Sec.
1001.150. A new paragraph (d) sets forth the criteria that the
Secretary will apply when the appropriation varies from the projection.
Projecting an appropriation amount for each fiscal year is central
to the process prescribed by the Act for calculating and awarding basic
grants for veterans' employment services to State Workforce Agencies.
At the National level, the funding formula prescribed by the Act is
applied to the projected appropriation amount in order to calculate the
estimated amounts of the basic grant allocations for each State. At the
State level, in turn, these estimated basic grant allocation amounts
provide the fiscal foundation for the preparation of State Plans.
The sequence of activities undertaken to estimate basic grant
allocation amounts and to prepare State Plans involve application of
staff effort and consume calendar time on the part of the State and
Federal agencies involved in this process. Further, in recent years,
the timing of the enactment of appropriations generally has made it
expedient to award grants to State agencies as soon as possible after
the appropriations are enacted and administrative allotments have been
completed. Therefore, paragraph (d) of Sec. 1001.150 provides that, if
the actual appropriation varies from the projection, the Secretary will
make every reasonable effort to avoid recalculating the estimated basic
grant allocation amounts, in order to maintain the delivery of services
to veterans and to minimize the administrative workload required to
recalculate grant allocations and to revise State Plans. For all these
reasons, upon enactment of an appropriation, it is the Department's
intent to proceed by awarding the estimated basic grant allocation
amounts to State agencies, unless the difference between the projection
and the appropriation creates a compelling reason to do otherwise. The
Department is able to cover small shortfalls between the appropriation
and the projection by adjusting the funds set aside for TAP workload
and exigent circumstances.
Paragraph (d)(2) provides that if the actual appropriation exceeds
the projection, the Secretary will determine whether the higher
appropriation creates a compelling reason to recalculate the States'
basic grants by reapplying the formula to the amount of funds so
appropriated. If there is no compelling reason to recalculate, the
increased amount available for basic grants will be retained as
undistributed funds, separate from the funds retained for TAP workload
and other exigencies. The intent will be to award these undistributed
basic grant funds to States during the applicable fiscal year as basic
grant supplements, in response to circumstances that arise during that
fiscal year. Similarly, paragraph (d)(3) provides that if the
appropriation falls below the projection, the Secretary will determine
whether the lower appropriation creates a compelling reason to
recalculate the States' basic grants. If awarding States the estimated
allocation amounts for basic grants would reduce the level of
unallocated funds below the threshold amount required for TAP and other
exigencies, a compelling reason to recalculate would exist. Therefore,
the basic grant allocation amounts will be recalculated in response to
a reduced appropriation to the extent that it is necessary to do so to
assure the availability of sufficient funding for TAP workload and
other exigencies. In cases where the appropriation is insufficient to
meet the hold-harmless provisions, we will follow the procedure
outlined in section 1001.152(d).
2. Minimum Funding Levels and Hold-Harmless Criteria
The Act authorizes the Secretary to establish hold-harmless
criteria and minimum funding levels (38 U.S.C. 4102A(c)(2)(B)(iii)).
This Final Rule establishes a hold-harmless rate of eighty percent for
the second phase-in year (fiscal year 2005) to mitigate the impact of
the most significant reductions to States' prior funding levels. This
is the same rate as that set forth in the Interim Final Rule for Fiscal
Year 2004. With the eighty percent hold-harmless during fiscal year
2005 each State will be provided no less than eighty percent of its
previous year's allocation. The eighty percent hold-harmless rate will
allow the reduction of funding, to those States impacted, to be
implemented incrementally. After the funding phase-in period is
completed in fiscal year 2005, a ninety percent hold-harmless rate will
be applied, ensuring each State will receive at least ninety percent of
their previous year's allocation. This will align the hold-harmless
level with the hold-harmless level established by Section 6 of the
Wagner-Peyser Act (29 U.S.C. 49e (b)(2)). In addition to the hold-
harmless provisions in any year, a State minimum funding level of 0.28
percent (.0028) of the prior year's total funding level for all States
will be applied, meaning that no State may receive less than that
amount. This is the same percentage applied in Section 6 of the Wagner-
Peyser Act (29 U.S.C. 49e(b)(3)).
One commenter, noting that State Plans are prepared in response to
estimated basic grant allocations based upon a projection of the
appropriation for a given fiscal year, requested clarification of the
policy that the Department would follow if the actual appropriation
fell so far below the projection that sufficient funding was not
available to comply with the 90 percent hold-harmless provision.
Response: In response to this comment, a new paragraph (d) has been
added to Sec. 1001.152. Section 1001.152 provides that two basic steps
would be followed in this instance. In the first step, the Department
would confirm or refine, as appropriate, the accuracy of the States'
estimates of TAP workload and would reserve sufficient funds from the
total amount available for allocation to the States for that purpose.
Beyond TAP workload, no funds would be reserved for exigent
circumstances because the shortfall in the
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appropriation would be the primary exigent circumstance to be
addressed.
In the second step, the Department would apply proportionally the
remaining balance available for basic grant allocations to the States
for that fiscal year. The proportion would be calculated by dividing
the remaining balance available for basic grant allocations by the
total estimated basic grant allocations for that fiscal year. The
proportion resulting from that calculation would be applied to each
State's estimated basic grant allocation to calculate the amount to be
awarded. For example, if the balance available was 79% of the total
estimated basic grant allocations, each State would be awarded 79% of
its estimated basic grant allocation for that fiscal year.
B. Other Funding Criteria
In addition to requiring the Secretary to use civilian labor force
and unemployment data in establishing States' funding levels, the Act
states that the Secretary ``shall make available to each State * * * an
amount of funding * * * using such criteria as the Secretary may
establish in regulation * * *'' (38 U.S.C. 4102A(c)(2)(B)(i)).
Accordingly, the rule provides that in addition to the amount awarded
based on the basic grant funding formula, described in section IV.A.1
of this document, the Secretary may distribute up to four percent of
the total amount available for allocation based on TAP workload and
exigent circumstances (38 U.S.C. 4102, 4102A(b), and 10 U.S.C. 1141).
A commenter asked us to clear up a perceived inconsistency between
the Preamble statement that ``* * * the Secretary may distribute up to
four percent of the total amount available for allocation'' in
reference to Sec. 1001.151(a) which states that ``[f]our percent of
the total amount at the national level will be available'' for TAP and
exigencies.
Response: The intent of the regulation is to provide that the
Secretary has authority to use ``up to four percent of the total amount
available for allocation will be available for distribution based on
Transition Assistance Program (TAP) workload and other exigencies.'' To
avoid any confusion, the regulation has been revised accordingly. The
funds set aside for TAP are available for programs in States and
overseas.
1. Transition Assistance Program (TAP) Workload
The Act requires the Secretary to implement programs to ease the
transition of servicemembers to civilian careers (38 U.S.C. 4102. See
also 10 U.S.C. 1141). TAP workshops provide such employment services
for transitioning servicemembers. Because active military personnel are
not included in the CPS civilian labor force data, or in the LAUS
unemployment data, the level of need for TAP workshops is not reflected
in the funding formula for the basic grants. Therefore, supplemental
funding is needed in order to ensure adequate funding is available to
provide TAP workshops. In the Final Rule, the allocation to the States
for TAP workshops is proportional to each State's TAP workload as
identified in its State Plan. Policy guidance was provided to States to
assist them in determining the amounts needed for this additional
workload, which is calculated on a per-workshop basis as identified in
the State Plan.
We received one comment supporting the method for allocating TAP
workshop funds.
2. Exigent Circumstances
Supplemental funding will be made available for exigencies,
including but not limited to, needs based on sharp or unanticipated
fluctuations in State unemployment levels and services to transitioning
servicemembers (as required by the Act). Economic and unemployment
conditions projected at the time of the grant application may not
reflect actual conditions. In such cases, program needs may warrant
additional funding. These funds will be made available based on need.
IV. Administrative Information
Regulatory Flexibility and Regulatory Impact Analysis
The Regulatory Flexibility Act of 1980, as amended in 1996 (5
U.S.C. chapter 6), requires the Federal government to anticipate and
minimize the impact of rules and paperwork requirements on small
entities. ``Small entities'' are defined as small businesses (those
with fewer than 500 employees, except where otherwise provided), small
non-profit organizations (those with fewer than 500 employees, except
where otherwise provided), and small governmental entities (those in
areas with fewer than 50,000 residents). We have assessed the potential
impact of this rule on small entities. This rule implements reforms to
the funding of the State operated veterans' employment and training
services and transitional assistance programs for separating
servicemembers. Because the rule affects only the distribution of
appropriated funds among the States, we have determined that the rule
will not have a significant impact on a substantial number of small
governments or other small entities. We are transmitting a copy of our
certification to the Chief Counsel for Advocacy for the Small Business
Administration. In addition, while these rules govern the distribution
and administration of funds appropriated by Congress, the rules
themselves do not result in an annual effect on the economy of
$100,000,000 or more; a major increase in costs or prices for
consumers, individual industries, Federal, State, or local government
agencies, or geographic regions; or significant adverse effects on
competition, employment, investment, productivity, innovation, or on
the ability of United States-based enterprises. Accordingly, under the
Small Business Regulatory Enforcement Fairness Act (SBREFA) (5 U.S.C.
Chapter 8), the Department has determined that these are not ``major
rules,'' as defined in 5 U.S.C. 804(2).
Paperwork Reduction Act
This Final Rule does not require any information to be collected,
therefore is not subject to review by the Office of Management and
Budget (OMB) under the Paperwork Reduction Act of 1995.
Executive Order 12866, Regulatory Planning and Review
The Department of Labor has determined that this rule is a
``significant regulatory action.'' However, it is not an economically
significant rule, and therefore, does not fall under the cost/benefit
assessment provisions of section 6(a)(3)(C) of Executive Order 12866.
While this rule affects the distribution among States of funds
appropriated by Congress, the rule itself will not materially alter the
rights and obligations of the State recipients, particularly in light
of the hold-harmless provisions included in the rule. Furthermore, the
rule itself will not: materially alter the budgetary impact of
entitlements, grants, user fees, or loan programs; have an annual
effect on the economy of $100 million or more, or adversely affect in a
material way the economy, a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or State,
local, or tribal governments or communities; create a serious
inconsistency, or otherwise interfere with an action taken or planned
by another agency. The rule may raise novel legal or policy issues
arising out of legal mandates, the President's priorities, or the
principles set forth in Executive Order 12866, therefore it has been
submitted to OMB for review.
[[Page 28406]]
Unfunded Mandates
Executive Order 12875--This rule does not create an unfunded
Federal Mandate upon any State, local, or tribal government.
Unfunded Mandate Reform Act of 1995--This rule does not include any
Federal mandate that may result in increased expenditures by State,
local and tribal governments in the aggregate of $100 million or more,
or increased expenditures by the private sector of $100 million or
more.
Executive Order 13132, Federalism
We have assessed this rule under Executive Order 13132 and found
that it will not have substantial direct effects on the States or the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government, within the meaning of the Executive Order.
Executive Order 12988
This rule has been drafted and reviewed in accordance with
Executive Order 12988, Civil Justice Reform, and will not unduly burden
the Federal court system. The rule has been written so as to minimize
litigation and provide a clear legal standard for affected conduct, and
has been reviewed carefully to eliminate drafting errors and
ambiguities.
Effective Date
This final rule is effective June 16, 2005.
List of Subjects in 20 CFR Part 1001
Employment, Grant Programs, Labor, Reporting and Record Keeping
Requirements, Veterans.
0
For the reasons set forth in the preamble, 20 CFR chapter IX is amended
as set forth below.
PART 1001--SERVICES FOR VETERANS
0
1. The authority for part 1001, subpart F continues to read as follows:
Authority: Sec. 4(a), Pub. L. 107-288; 38 U.S.C. 4102A.
0
2. Part 1001 is amended by revising subpart F to read as follows:
Subpart F--Formula for the Allocation of Grant Funds to State Agencies
1001.150 Method of calculating State basic grant awards.
1001.151 Other funding criteria.
1001.152 Hold-harmless criteria and minimum funding level.
Subpart F--Formula for the Allocation of Grant Funds to State
Agencies.
Sec. 1001.150 Method of calculating State basic grant awards.
(a) In determining the amount of funds available to each State, the
ratio of the number of veterans seeking employment in the State to the
number of veterans seeking employment in all States will be used.
(b) The number of veterans seeking employment will be determined
based on the number of veterans in the civilian labor force and the
number of unemployed persons. The civilian labor force data will be
obtained from the Current Population Survey (CPS) and the unemployment
data will be obtained from the Local Area Unemployment Statistics
(LAUS), both of which are compiled by the Department of Labor's Bureau
of Labor Statistics.
(c) Each State's basic grant allocation will be determined by
dividing the number of unemployed persons in each State by the number
of unemployed persons across all States (LAUS for the individual States
/ LAUS for all States) and by dividing the number of veterans in the
civilian labor force in each State by the number of veterans in the
civilian labor force across all States (CPS for the individual States /
CPS for all States). The result of these two ratios will be averaged
and converted to a percentage of veterans seeking employment in the
State compared to the percentage of veterans seeking employment in all
States. Three-year averages of the CPS and LAUS data will be used in
calculating the funding formula to stabilize the effect of annual
fluctuations in the data in order to avoid undue fluctuations in the
annual basic grant amounts allocated to States.
(d) State Plans are prepared in response to estimated basic grant
allocation amounts prepared by the Department of Labor, based upon a
projection of the appropriation. Variations from Department of Labor
projections will be treated as follows:
(1) If the actual appropriation varies from the projection, the
Secretary will make every reasonable effort to avoid recalculating the
estimated basic grant allocation amounts, in order to maintain the
delivery of services to veterans and to minimize the administrative
workload required to recalculate grant allocations and to revise State
Plans. Therefore upon enactment and allotment of an appropriated
amount, it is the Department's intent to proceed by awarding the
estimated basic grant allocation amounts to State agencies, unless the
difference between the projection and the appropriation creates a
compelling reason to do otherwise.
(2) If the actual appropriation exceeds the projection, the
Secretary will determine whether the appropriation and the projection
is large enough to warrant recalculating the State basic grant amounts.
In such case, state basic grant amounts will be recalculated in
accordance with paragraphs (a) through (c) of this section. If it is
determined that no compelling reason to recalculate exists, the
increased amount available for basic grants will be retained as
undistributed funds. These undistributed basic grant funds will be
retained separately from the funds retained for TAP workload and other
exigencies, as established by Sec. 1001.151(a). The intent will be to
award these undistributed basic grant funds to States as basic grant
supplements, in response to circumstances arising during the applicable
fiscal year.
(3) If the actual appropriation falls below the projection, the
Secretary will determine whether the lower appropriation creates a
compelling reason to recalculate the State basic grant amounts. If it
is determined that not recalculating the State basic grant amounts
would jeopardize the availability of sufficient funding for TAP
workload and other exigencies, a compelling reason to recalculate would
exist. In that case, the State basic grant amounts will be recalculated
under paragraphs (a) through (c) of this section in response to the
reduced appropriation, to the extent required to assure that sufficient
funding is available for TAP workload and other exigencies.
Sec. 1001.151 Other funding criteria.
(a) Up to four percent of the total amount available for allocation
will be available for distribution based on Transition Assistance
Program (TAP) workload and other exigencies.
(b) Funding for TAP workshops will be allocated on a per workshop
basis. Funding to the States will be provided pursuant to the approved
State Plan.
(c) Funds for exigent circumstances, such as unusually high levels
of unemployment, surges in the demand for transitioning services,
including the need for TAP workshops, will be allocated based on need.
Sec. 1001.152 Hold-harmless criteria and minimum funding level.
(a) A hold-harmless rate of 90 percent of the prior year's funding
level will be applied after the funding formula phase-in period is
completed (beginning fiscal year 2006 and subsequent years).
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(b) A hold-harmless rate of 80 percent of the prior year's funding
level will be applied for fiscal year 2005.
(c) A minimum funding level is established to ensure that in any
year, no State will receive less than 0.28 percent (.0028) of the
previous year's total funding for all States.
(d) If the appropriation for a given fiscal year does not provide
sufficient funds to comply with the hold-harmless provision, the
Department will:
(1) Update, as appropriate, the States' estimates of TAP workload
and reserve sufficient funds for that purpose from the total amount
available for allocation to the States. Beyond TAP workload, no funds
will be reserved for exigent circumstances because the shortfall in the
appropriation will be the primary exigent circumstance to be addressed.
(2) Apply proportionally the remaining balance available for basic
grant allocations to the States for that fiscal year. The proportion
will be calculated by dividing the remaining balance available for
allocation by the total estimated State basic grant allocations for
that fiscal year. The proportion resulting from that calculation will
be applied to each State's estimated basic grant allocation to
calculate the amount to be awarded.
Signed at Washington, DC, this 11th day of May, 2005.
Charles Ciccolella,
Deputy Assistant Secretary for Veterans' Employment and Training.
[FR Doc. 05-9771 Filed 5-16-05; 8:45 am]
BILLING CODE 4510-79-P